Ruling by Special Bench of Delhi Income-tax Appellate Tribunal on transfer pricing aspects of marketing intangibles [TAX ALERT]

February 21, 2013

This Tax Alert summarizes a recent ruling [TS-11-ITAT-2013(DEL)-TP] of the Special Bench of Delhi Income-tax Appellate Tribunal (SB) in a group of cases involving several taxpayers, with the lead case being that of Ms. L.G. Electronics India Private Limited (Taxpayer) v Assistant Commissioner of Income-tax.

The issue for consideration before the SB was the appropriateness of a transfer pricing (TP) adjustment for “excessive” advertising, marketing and promotional (AMP) expenditures, which the Taxpayer is alleged to have incurred for the benefit of its associated enterprise (AE) during the Financial Year (FY) 2006-07.

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